East Greenwich High School senior Evan Macaulay was celebrated earlier this month for his award-winning essay about the benefits of investing in electric vehicles and associated technologies. He won first place in Rhode Island and fourth place nationally in the Fall 2021 National InvestWrite competition.
The SIFMA Foundation’s InvestWrite national essay competition bridges classroom learning in math, social studies, and language arts with the practical research and knowledge required for saving, investing and long-term planning. It also serves as a culminating activity for The Stock Market Game, an acclaimed financial education program in which students invest and manage a hypothetical $100,000 online portfolio of stocks, bonds, mutual funds and cash over a period of 14 weeks, a semester, or a school year.
Students in grades 4 through 12 researched how industries would evolve and produce new jobs and careers and how they, individually, might invest in this growth. Evan and his teacher, Patricia Page, were honored by the SIFMA Foundation during a presentation at the school on April 6.
Evan Macaulay’s Winning Essay:
Charging the Future of Transportation
With consistent innovations and the introduction of new technologies each year, one industry has made strides far surpassing expectations. The electric vehicle (EV) industry has grown exponentially since the 1997 debut of the Toyota Prius, the first electric hybrid production car. Since that point, the emergence of other hybrid and fully electric cars has become increasingly prominent with companies like BMW, Ford, Tesla, Rivian, and others. Global EV sales have risen 40 percent between 2019 and 2020 and should be expected to rise even further considering discussions at the COP26 climate summit about reducing carbon emissions. With the supplementation of the EV industry, there is great potential for electric cars to become more practical and readily available thus creating opportunities for sound investment strategies and careers.
Major consumer concern with the early introduction of EVs has been tied to their limited driving range before needing to recharge. With early electric production cars like the Tesla Roadster, the owner could expect to get only around 200 miles per charge as compared to the average gas-powered car range of about 400 miles per tank. Therefore, EV owners were having to stop twice as much and wait for extensive amounts of time for their vehicle to charge, making them fairly inconvenient and impractical for the everyday consumer.
However, over the past few years, the range of EVs has improved to accommodate a lifestyle that most consumers are accustomed to. For example, at Tesla’s Battery Day event in 2020, they previewed a battery designed by Panasonic called the 4680 cylindrical battery which will reportedly hold five times as much energy for half the cost of previous designs. This innovation will enhance the driving range and power of EVs making them more practical and better suited for modern life. GM has taken the initiative to work towards an increased range as well, building a battery research center to engineer a battery with the capability to last for 600 miles on a single charge. Engineering a battery of this capacity will mean doubling the average range of electric car batteries, making them even more efficient than gas-powered vehicles in terms of driving range.
Another issue faced by consumers in the past has been a lack of availability of EVs to the average consumer. Originally, fully electric cars could only be found on the high-end side of the automobile industry, making them inconvenient to obtain even for those with the means to purchase one. But increased production and manufacturer involvement is creating a supply chain that is allowing consumers to purchase EVs at an enhanced rate. There are over 40 electric car models for sale currently in the United States with even more expected to release in the near future. With added diversity of cars and car manufacturers, EV numbers are getting to the point where options may rival those of a gas-powered vehicle. In addition, the EV market has begun to open to newcomers like Rivian, which will enhance competition among manufacturers, therefore, pressing the need to continue innovations in technology moving forward. Entrances like Rivian’s will also be instrumental in reaching all consumers by offering various car types with Rivian specifically presenting their pickup truck design, which is by far the most utilized vehicle type in the United States.
Innovations in practicality and availability are not the only disruptive properties of the EV industry. The industry also offers a wide range of investment and career opportunities. For example, GM’s new innovation center will offer many new career opportunities for up-and-coming engineers with more than 200 job openings through the production of new battery prototypes and designing new EVs to be more efficient and readily available for public use. These career options also open the prospect of investing in emerging companies within the industry as well as older companies looking to improve upon the evolving outlook of the automobile industry. With that being said, looking at the investing aspect of the EV market, there are many companies that stand out as potentially profitable options for investments.
One company with the potential for reliable gains in the future is Panasonic. Even though Panasonic is not a car company specifically, their work alongside Tesla with the intent to build towards longer-lasting EV batteries has the potential to be influential over the entirety of the EV industry. Panasonic also provides a low-risk investment option with a fair market value and favorable PEG ratio of 0.75. This stock would be well supplemented with the addition of investment in General Motors considering the recent goals of General Motors in terms of battery development along with their undervalued stock with an even lower PEG ratio of 0.67 which is why I have chosen these two stocks for my investment portfolio.
However, investment diversification should not only include individual stocks when considering risk in investments but should also consider ETFs and bonds in an investment strategy. As such, I found that the inclusion of the iShares TIPS Bond ETF in my investment strategy could be extremely beneficial considering that this bond ETF is stable and sustainable, relying on inflation-protected treasury bonds which will allow for a consistent flow of income. EVs offer the potential for expansive career options as well as investment opportunities making the innovations of this industry an intriguing path to consider moving forward.
When considering the innovations of the electric automobile industry, it is important to look at the great strides made by companies leading to limitless potential in terms of career and investment options. Companies like GM and Panasonic are actively working to improve EV range making them more practical and competitive with gas-powered vehicles. Moreover, the introduction of new competitors in the EV industry such as Rivian offers more variety in automobile options allowing EVs to be readily available to the general public. Furthermore, EVs provide many career and investment opportunities which will continue to grow as more innovations are made.
Evan plans to study mechanical engineering at URI come fall.